Bagyenda directed Crane Bank to take over Amama Mbabazi’s bank — Sudhir
“Crane Bank Limited wasn’t interested in assets of NBC. Crane Bank didn’t bid for these assets. Crane Bank was compelled to acquire these assets byJustine Bagyenda. She did this over the telephone. She called up the MD, Kalan, and informed us that she was directing us to acquire these assets. She wasn’t asking, it was an order from the authority.”
BoU PROBE | Justine Bagyenda directed former Crane Bank managing director AR Kalan over the telephone to take over assets and liabilities of National Bank of Commerce (NBC).
Appearing before the Committee on Statutory Authorities and State Enterprises (Cosase) on Wednesday, former Crane Bank Limited vice chairman and majority shareholder Sudhir Ruparelia told the legislators that Bagyenda, then the executive director in charge of banking supervision at Bank of Uganda, called up Kalani and gave the orders.
“Crane Bank Limited wasn’t interested in assets of NBC. Crane Bank didn’t bid for these assets. Crane Bank was compelled to acquire these assets by Bagyenda,” Sudhir told the committee.
“Bagyenda did this over the telephone. She called up the MD, Kalan, and informed us that she was directing us to acquire these assets. She wasn’t asking, it was an order from the authority.”
The National Bank of Commerce is among the seven defunct commercial banks whose fate was controversial sealed by Bank of Uganda over the last 25 years.
NBC was owned by former prime minister Amama Mbabazi, former Supreme Court judge George Kanyeihamba and business Amos Nzeyi, among others.
While Parliament has placed central bank officials, past and present, in the furnace to explain the circumstances of the closure of these banks, their officials and shareholders have also been summoned to to give insights into the closures.
Sudhir told Cosase that when Bagyenda made the order to Crane Bank, Kalan called up the members of the board and informed them of the directive following which Crane Bank signed the Purchase of Assets and Assumption of Liabilities Agreement with BoU on September 27, 2012.
The businessman and property magnate also denied allegations by NBC that Crane Bank took over their Kabale land, saying that the said land was never transferred to Crane Bank because CBL was never interested in land in Kabale.
Sudhir also said that CBL paid Shs1 billion as consideration for NBC and denied Crane Bank ever took possession of NBC’s bad book, saying the said property wasn’t transferred to CBL and it is still in escrow account with the central bank.
An escrow is a written agreement (or property or money) delivered to a third party or put in trust by one party to a contract to be returned after fulfillment of some condition.
The former CBL owner’s revelation shocked MPs with Katuntu stating that there is need to check the casual manner with which Bank of Uganda conducts business.
“The issue of telephone call, it isn’t the first time we are hearing this. We should be interested in how does our regulator conduct business,” Katuntu said.
“You can’t have a central bank of the country conduct business this way. This isn’t something I expect from financial sector. The most disciplined sector should be security.”
Ironically, it was again Bagyenda cited in various fora, from Cosase to the US southern district court as having led the sale of Crane Bank Limited to dfcu Bank.
Crane Bank was handed to dfcu Bank on a silver platter in 2017. Sudhir has since sued both the party that took over Crane Bank and BoU that liquidated.